The majority of countries foresee weak growth (less than 2 %) in 2025, driven primarily by private consumption. Business investments are still weak, despite a small upturn next year.
Rising real wages are a basis for increasing consumption, as is low inflation and falling interest rates.
Profits are still below normal levels and are holding back investments.
Shortage of skilled labour remains the biggest labour market problem.
Major risks to the forecast are increasing commodity prices, which also relates to members’ assessment of high risks of weak global trade, uncertainty, geopolitical fragmentation and geopolitical tensions being spread. Another risk to the forecast is how economic policies are pursued.
The balance between fiscal and monetary policy is relatively good, but there is room for a somewhat more expansionary monetary policy, and in the Euro Area for a somewhat more expansionary fiscal policy as well.
Proposed tariffs on Chinese goods are mostly seen as appropriate. When discussing Chinese competitiveness, state aid etc., trade with third countries must be taken into account.
AI will improve innovation, productivity and growth but threatens jobs.
We are unfortunately starting to see how an ageing population affects the economy.